Malawi: Cost of running presidential jet hits K1 billion

Malawi Government has squeezed from taxpayers close to K1 billion (about $4 million) to run the Falcon 900EX presidential jet since it was bought 30 months ago for $25 million (K7 billion). 

Information we have been privy to shows that the K1 billion price tag—roughly 14 percent of the purchase price—includes insurance for the jet’s three engines, craft insurance, maintenance subscriptions, pilot hire, pilot training, jet fuel, license, A-checks and C-checks, among other costs.

Information in our possession also shows that Malawi still spends on the jet even when it is just parked in the hangar.

According to a highly placed source at OPC, other costs came from underutilisation since the jet is expected to fly between 13 and 15 hours a month, failing which, international aviation rules exact monetary penalties. Malawi’s presidents do not fly the jet that regularly.

Selling or leasing option

State House press secretary Steven Nhlane confirmed in an e-mail response on Wednesday that President Joyce Banda still wants the jet either sold or leased; hence, her decision to hire a consultant to explore the most viable option for the jet.

“It may be sold or leased depending on the recommendation from the consultant. Her main concern is that it is expensive because even when it is just parked, government loses a lot of money. She also wants to show by example that she is committed to making her austerity drive a reality,” Nhlane said.

President Joyce Banda, who has publicly stated her intention to dispose of the jet, is expected to consult her Cabinet on the jet’s future sometime next week, according to our OPC source.

At the centre of the Cabinet discussions could be the opportunity cost of keeping such a luxurious plane—designed for the rich and famous—in one of the world’s 10 poorest countries.

The K1 billion spent so far is higher than the K996 million (about $3.98 million) allocated to all essential services at Kamuzu Central Hospital (KCH), one of Malawi’s three referral hospitals after Queen Elizabeth and Mzuzu, that admits around 40 000 patients and treats about 250 000 out-patients annually from Central Region districts.

KCH director Dr. Noor Alide confirmed the budget and patient figures.

In an interview on Monday, Clerk to Cabinet in the Office of the President and Cabinet (OPC), Clement Chinthu Phiri refused to confirm any specific figures for the jet, but generally said “it is expensive for the Malawi budget” to run the presidential plane.

“It is an expense that can be avoided if it were possible,” he said.

Costs on pilots

Our investigations, based on interviews with well-placed sources and access to confidential documents, showed that among the costs Malawi has incurred towards the running of the jet are that in 2010 and 2011, OPC sent four pilots for training—two from the Malawi Defence Force (MDF) and two from Air Malawi to be flying the President.

The four pilots—Captain Abraham Mangwana and Captain Joachim Fernandez of Air Malawi, Lieutenant Colonel Ian Chima and Major Leonard Gunda of MDF—were trained at a cost of US$40 000 (K10 million) per head, which totalled $160 000 (K40 million at present exchange rates).

However, one of our OPC sources said the late president Bingu wa Mutharika refused to use the local pilots, not even as co-pilots, opting for hired hands from Falcon Pilots International.

Asked why government continued to hire pilots after training its own, Chinthu Phiri only said the local pilots “were not given a chance to touch the craft”.

In a separate interview, Captain Mangwana confirmed he never touched the plane since his month-long training in the US last year.

For him and others to start flying the Falcon 900EX now, it will require that they undergo a five-day refresher course because of the long period off such a cockpit.

“What was required was that after the training, we needed to be given a chance on the plane accompanied by an instructor for some time before we could fly on our own,” said Captain Mangwana. That never happened, he said.

Apart from the four pilots, Malawi also trained two MDF engineers, Lt. Colonel Jones Giva and Lt. Colonel Mkandawire to be servicing the jet, yet OPC hires engineers from Dassault Falcon Service for all serious maintenance works.

This outsourcing of skills was one of the main contributors to the high cost of running the jet and was a major drain on forex at a time Malawi was reeling from a historic hard currency squeeze.

This is because each time a president has to travel; government hires two pilots, one based in Belgium and another in France, according to the OPC source.

He added that government pays 800 euros (K284 000) per day as hiring fees and 90 euros (K31 950) as daily per diem, as long as they are in Malawi even when they are not flying.

These payments are exclusive of hotel accommodation at Sunbird establishments or Ryalls where they are usually accommodated as well as land transport whenever they are in Malawi and wherever they go with the president.

Currently, Sunbird hotels charges between about K40 000 and K52 000 per night for bed and breakfast, minus lunches, dinner and laundry whereas bed and breakfast at Ryalls attracts about K52 000.

“The government also pays five percent of the total paid to the pilots to Falcon Pilots International,” said our source.

Information in our possession indicates that between January 2011 and May 2012, OPC has hired the two pilots nine times for an average of five days; the longest being 10 days when the late president went to Germany, Iran and USA.

Simple calculations, which may be on the conservative side as are just based on the average number of days, would mean that for 45 days, the two pilots were paid 80 100 euros (K28.4 million) using an average of five days each for the nine sessions, calculated at the present euro to kwacha exchange rate.

Taxpayers are also responsible for the pilots’ air travel from their base, which costs 2560 euros (about K908 800) return apiece, making a total of 5120 euros (K1.8 million) each trip.

Aviation costs
 
To comply with international aviation standards, all planes are put on a compulsory electronic monitoring system known as Continued Aircraft Maintenance Programme (CAMP); another cost.

For Falcon 900EX, Malawi pays 13 000 euros (K4.6 million) annually for the computerised service at the Dassault Falcon Service in Paris, France.

The Falcon 900EX has three engines and each has to be insured separately at $250 (about K63 000) per hour each, every time the plane flies.

This is separate from the $75 000 (K18.8 million) annual insurance for the whole jet. The Malawi presidential jet is insured with Lance Tolland Associates of US at a total cover of $150 000 (K37.5 million), our source said.

The plane is also supposed to undergo compulsory A-Check (annual check) which cost a minimum of $100 000 (K25 million) and a compulsory C-Check (comprehensive check) every five years at a minimum cost of 500 000 euros (K178 million).

The last time the Malawi presidential jet went for a C-Check was in 2011. The cost came to 1 million euros (K35.5 million), the addition having been incurred because, among other factors, Mutharika wanted it re-painted and its interiors changed, according to the source.

The source said the Malawi presidential jet consumes fuel worth $25 000 (K6.3 million) one way or $50 000 (K12.6 million) for a return trip to Europe.

Another cost comes from navigation charts (air space map) which pilots use when they fly. These charts are changed monthly or after every two months. Malawi pays a subscription of $12 000 (K3 million) annually to access these charts for the jet.

In addition, aviation rules require that each time a plane flies over another country’s air space; owners have to pay that country for using their space.

If, for example, the presidential jet flies to Washington DC, Malawi has to pay $6 000 (K1.5 million) calculated to be paid to all countries in between and the US one way.

Malawi bought the presidential jet from General Electric Motors in 2009 where it was being used by that company’s chairperson, our investigations show.

The company was forced to sell the jet under pressure from the US government at the height of the global economic downturn, as private firms sought government help to resuscitate their businesses.

Speaking from an industry player’s point of view, Air Malawi chief executive officer Patrick Chilambe said it is possible to avoid the costs incurred in owning a presidential jet, but cautioned “it would be cheaper to fly commercial if the President is not a frequent flier.”

“If she wouldn’t be travelling frequently, it would be cheaper to fly commercial, but if she is a frequent flier, it would be expensive,” he said when Weekend Nation asked him to comment on the available options as Malawi considers selling the Falcon 900EX.

Chilambe, a former Secretary to the Treasury (ST), said “assessing the whole issue, expenditure on the presidential jet is not necessary and cannot be justified.”

“The problem with aircrafts is that there are parts that are time-bound whether you fly or not you have to replace them. This is costly,” he said.

The purchase of the jet became the symbol of Mutharika’s mismanagement of resources and led to the bad blood between the country’s donors and Lilongwe that saw a once vibrant economy disintegrating as a coordinated freeze in budgetary support crippled public spending and blocked an important source of forex, only second to tobacco.

Malawi’s long-time donor Britain was annoyed with the purchase and wanted Malawi to sell the Jet, but the Mutharika administration remained adamant, arguing at the time that the jet would serve Mutharika better, especially when executing his responsibilities as chairperson of the African Union.

London then proceeded to deduct £3 million (K1.3 billion at present exchange rates) from their budgetary support to Malawi in 2009. During the 2009/10 financial year, Britain planned to give Malawi £22 million (K9.7 billion), but that was cut to £19 million (K8.3 billion).